Recognizing and Preventing the Financial Exploitation of Elders

Elder abuse takes many forms, and as adults become older they fall victim to financial exploitation more easily. This type of abuse is preventable, but what steps can you take to protect yourself and your loved ones? The key to prevention is to recognize the warning signs, understand the risk factors and report the problem.

According to a study initiated by AIG Life & Retirement, almost half of seniors 65 or older manage their own finances, including paying bills and investing. Only 25% of seniors use trusted family members, friends or advisors to discuss money matters.1 This statistic is concerning because as adults age, they become more susceptible for unscrupulous people to take advantage of them.

The National Council on Aging estimates the cost of elder fraud and abuse is between $2.9-$36.5 billion every year, and even these numbers are under-reported.2 Ongoing studies by AIG, have shown that individuals need to be planning to live to 100 years or even older.3 According to a survey by the CDC in 2014, the United States had a population of 72,197 individuals that were older than 100 years.4 Because of this longevity issue, we all need to protect ourselves against the threat of elder financial abuse.

Typically, scams are initiated via telephone or over the internet and involve strangers. 50%-60% of seniors are not aware or mindful of the following common scams:5

  • Pigeon drop: The victim is told a significant amount of money will be shared with them, but upfront money is needed to initiate the transaction.
  • Invoice scams: The victim is contacted by someone claiming to work for a company (i.e. utility or phone company) trying to collect fees.
  • Prepaid credit/debit card scams: The victim is asked to make payments on debt owed to well-known companies or for past due utilities.

The report also found that seniors are trying to be more aware of scammers and are taking steps to avoid becoming victims. Up to 92% are not responding to phone calls, texts or emails requesting any personal information unless they initiated the contact. They are also not clicking on links from unknown senders, reviewing credit card statements more carefully, and are setting up alerts with their financial institutions.6

The majority of seniors say they would have no problem consulting with others on what to do if they fell victim to financial exploitation, but still most of these incidents go unreported. Approximately 2/3 of seniors do not have or know if they have a Power of Attorney (POA) in place, which can act as a safeguard against financial abuse. 90% of adults involve their spouse or significant other in conversations with their financial professional, and by having a financial advisor seniors are 20% more likely to have safeguards in place, like a POA.7

An average of 10,000 adults per day are turning 65, people are living longer, and serious and debilitating diseases like Alzheimer’s and Dementia are affecting more and more people every day.8 Protecting oneself is becoming a collaborative effort between family members and trusted advisors. Having a financial advisor can help educate families on how to protect themselves and their loved ones by making sure they have a trusted contact or POA in place and by facilitating important planning conversations before an emergency arises. If you see or know someone that you suspect is being neglected or abused, reach out to a trusted professional, friend or family member. If an elderly person needs immediate assistance, call 911 or contact the Elder Abuse Hotline at 1-800-677-1116. You can also find local resources at the National Center on Elder Abuse.

For your added security regarding Wedbush accounts, please remember…

  • We cannot accept orders via email or voice mail. We must speak with you concerning your accounts.
  • We will never give out information to anyone other than you concerning your accounts.
  • We will never distribute any money to anyone other than you, and we must speak with you personally before doing so.
  • When calling in to Wedbush, office personnel will ask you to verify personal information to keep your accounts safe.

If you are looking to safeguard your future with the help of an advisor who understands your needs and will actively maintain the security of your accounts, reach out to Senior Vice President of Investments, Jonathan Poster for a custom consultation.

Resources:

  1. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.” Last modified September 26, 2019. https://www.businesswire.com/news/home/20190926005442/en/.
  2. “Elder Abuse Statistics & Facts | Elder Justice.” NCOA. Last modified June 15, 2018. https://www.ncoa.org/public-policy-action/elder-justice/elder-abuse-facts/.
  3. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.”
  4. Xu, J. “Mortality among centenarians in the United States, 2000–2014”. NCHS data brief, no 233. Hyattsville, MD: National Center for Health Statistics. 2016. https://www.cdc.gov/nchs/data/databriefs/db233.pdf.
  5. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.”
  6. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.”
  7. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.”
  8. “One in Two Seniors Manage Finances Alone, Leaving Them Vulnerable to Scams and Financial Exploitation, According to AIG Plan for 100 Elder Financial Abuse Study.”

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